Lower-priced retailers, like TJX Cos Inc., which runs the T.J. Maxx chain, and Ross Stores Inc., reported some of the largest gains as shoppers looked for deals on designer-brand clothes and home goods. Both retailers raised their quarterly profit forecasts.

"In June, the consumer put on a very cautious hat, they started pulling back," said Keith Jelinek, a director in AlixPartners' global retail practice.

Sales for the 20 chains in the Thomson Reuters I/B/E/S same-store sales index rose 0.1 percent, below the 0.5 percent analysts expected, and well below the 6.7 percent pace a year earlier.

Still, Macy's, Target and Kohl's all maintained their quarterly profit outlooks, sending their shares up in late-morning trading, and helping to send the Standard & Poor's Retail Index up 1.3 percent.

"The anticipated sales slowdown is here, but it isn't a disaster," said Walter Stackow, an analyst with Manning & Napier, which owns retail stocks. Stackow noted that shares have been under pressure of late.

There were also hopeful signs in the U.S. labor market. Private employers stepped up hiring in June, while the number of Americans filing new claims for jobless benefits last week fell by the most in two months.

The International Council of Shopping Centers forecast same-store sales rising by 1 percent to 1.5 percent in July.

Macy's shares were up 3.6 percent, while Kohl's rose 7.3 percent. Other winners were TJX and Ross Stores, jumping 4 percent and 6 percent, respectively. Target was down 0.3 percent.

'JUNE WILL UNNERVE RETAILERS'

The weak June numbers at many large chains showed how quickly shoppers can decide to put off spending -- and could result in discounts during the upcoming back-to-school season, when parents buy clothes and supplies for school-age children.

Adding to the risk, he said, retailers bought fall merchandise in February, when the U.S. economic recovery seemed more solid. If they have too much inventory, they may slash prices, hurting gross margins.